Pros of Limited Liability
• Limited liability: This means that the owners and shareholders personal property are protected when the LLC is bankrupt or sued. Also, in some cases of fraud and illegal acts the courts will pierce the corporate veil that protects the member or members so that they become personally liable for such acts. However, it was said that since there are little to no precedent in this area of such law it is difficult to determine under which circumstance the veil would be removed.
• Unlimited amount of members- You must have more than one owner otherwise you can be taxed as a sole proprietor. Members do not necessarily need to be citizens of the country and can an owner that is another owner of another LLC. Also, LLC are not required to have a board of directors or shareholder meetings, less paperwork and record
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• Lack of case law: The LLCs are a new concept of a business structure so, there are much case law that exist and it is very important for predictability. For example, if you know a court ruled in a certain way you can act accordingly to protect yourself, but since there are few cases laws there is more vulnerability that can cause you a great amount of liability.
• Transfer fees: Share transfers for LLCs that are not listening on the Stock Exchange of Trinidad and Tobago attract Stamp duty payable to the Board of Inland Revenue on an ad valorem basis at the rate of $5.00 per $1000. A fixed stamp duty of $25.00 is paid on transfer to a nominee. Consequently, shares listed on the Stock Exchange can be transfer without being liable to stamp duty unless they do not follow the rules of the exchange, and they would have to pay event duty which is 5% of the market value of the
Corporation – “A business organization that exists as a legal entity and provides limited liability to its owners.” (Longenecker, Petty, Palich, Hoy, Pg. 205) The main advantage of a corporation is that the business liability falls onto this entity instead of the individuals that own it. The disadvantages of this organization are found mostly in its formation. A corporation is expensive to create and requires compliance with state
LLCs must typically pay more fees to file as LLCs compared to some other business entities or sole proprietorships. Additionally, many states require yearly renewal fees. However, these fees are usually less than what some other corporations have to pay. Because of the protections afforded to LLCs, some types of businesses are ineligible to file as LLCs. Banks, insurance companies, and medical service companies are examples of businesses that can not be a LLC. Another big disadvantage is taxes. Although LLC’s allow owners to avoid federal taxes, you may actually end up paying more than it would with a different corporation, depending upon the nature of the business. Working with an accountant and/or tax lawyer is a really good idea when planning your business and forming your LLC but can also be quite expensive. The LLC business form is a relatively new concept. As a result, not a lot of cases have been decided surrounding LLCs. Case law is important because of predictability. If you know a court has ruled a certain way, you can act in a specific way to protect yourself. But if not many laws have been established yet, there is a certain vulnerability with your corporations that could expose you to greater
When discussing the concept of contract law, there exist two bodies of legal rules that may apply to the contract. These bodies are the common law of contracts and Article 2 of the Uniform Commercial Code or the UCC. The common law of contracts is court made and is constantly changing, but the UCC is required in every state within the U.S.A. It is important to know which one to use and when, as well as what the differences between them are.
This is a complex case, involving multiple parties and several variables that need to be examined thoroughly. The parties mentioned include Knarles operator of the facility maintenance company, his son Barkley, their employee, a licensed plumber, and Mr. Chetum. Although in the end Chetum is suing the facilities maintenance firm for a breach of contract, all factors must be examined to determine proper fault.
Liability – The business has limited liability. The owners and shareholders are generally protected from most lawsuits.
There will be more tax deductions available to you after Forming an LLC. A few of these deductions include benefits like a retirement plan, medical expenses, business trips and client entertainment. The IRS audit rate for an LLC is much lower than that of a sole proprietor. You can own and be employed by an LLC at time same time, eliminating the self-employment return from your list of necessary tax documents.
The limited partner only risks what they invested in the business. The downside is if the limited partner becomes active then they could potentially lose personal assets. The S corporation is a more favorable tax option on income. The disadvantage is there is certain requirement that must be met. The LLC is a great option. With this type, the risk is only what is invested unlike sole proprietorship. It is easy to set up, and has tax advantages. The downside is if a corporation wanted to switch to C, it would have to pay additional taxes. I do believe the option they picked is best for them at that time. C has tax advantages. If they started with LLC and later wanted to change, it would cost them. C is a great way to get capital as well.
Max was negligent in failing to warn of Joe of the hazardous door, which caused Joe’s injury.
The Economic Dimension: Do corporations benefit from shareholders limited liability if so how? For example, the company should obtain insurance, and if the company is sued the defendant is not held liable. If someone sues the insurance company is held liable. The law firm argued that court should pierce the business veil, because did not observe corporate formality, and because Brennan brothers did not honor their promises to pay their legal bills. Generally, shareholders are not personally liable for corporate acts.
Given the situation, as manager of the office, Sara must talk to Nell and tell her that she can not allow her to stay doing her work because she is not fit to comply with them due to her drunken state. However, you must ask her to leave the office and return the next day when she is already sober to talk about the particular situation.
The main legal issue before the court arises, in determining whether liability should be extended to reach assets beyond those belonging to the corporation and whether the corporate veil should be pierced with regard to personal liability to others.
Being the owner of LSU, Joe probably operates as a sole proprietor. It is recommended that the business change its entity selection to limited liability company (LLC). The main advantages to an LLC are the protection the LLC owners receive from business creditors, and the fact that the owners can still participate in the management of the business.
Piercing the Corporate Veil Since the establishment in Salomon v Salomon, the separate legal personality has been long recognised in English law for centuries, that is to say, a limited liability company has its own legal identity distinct from its shareholders or directors. However, in certain circumstances the courts may be prepared to look behind the company at the actions of the directors and shareholders. This is known as "piercing the corporate veil". There are numerous cases concerning the "piercing the corporate veil", among which, Jones v Lipman[1] was a typical case. Lipman sold land to Jones by a written contract but refused to complete the sale because of another good deal, instead he offered damages for breach of contract.
The XYZ Corporation was established in 2004 and their main office is located in Vancouver, BC. The company’s main objective is to create new innovating technology for media devices, computers, and digital music players. They deal with the design, manufacturing and marketing of the products. XYZ Corporation has been providing Canadians with groundbreaking technology throughout the years and continues to create new technology to provide others with top-level technology. Although, recently their success rate has appeared to drop rapidly due to a number of factors that will be explored throughout this case study. Their main objective is to target the problems so that they can work towards having the issues resolved as quickly as possible. If they do not take any course of action, the state of the company may be in extreme danger. This case study is designed to explore the areas of the company and discover the problems blocking the XYZ Corporation from success.
6.convenience or burden: When operating a LLC there is no personal liability to the partners or owners.